The best payment cards to pack for your skiing holiday

26 Jan, 2016

With thousands of winter holidaymakers heading off to ski slopes in the coming weeks here’s a timely reminder of the charges you could face when using your plastic abroad.

Debit and credit cards offer a cheap and convenient way to pay in the UK, but the fees and charges can be expensive when used overseas, so it’s worth finding a cheaper alternative before you travel.

Prepaid currency cards from Centtrip, Cash Passport, Caxton FX and myTravelCash are amongst the most competitive according to my recent research and the cost savings make it worth packing a specialist travel card with your passport whenever you go abroad.

Most banks add on a foreign usage fee to all credit card cash and purchase transactions. In the majority cases it’s around 2.75% to 2.99%.

But that’s only half the story, as on top of the usage fee, a typical credit card cash transaction will cost you around an extra 3%, so an ATM withdrawal of £100 currency equivalent can easily set you back a total of £6, thus best avoided unless an emergency.

If you’re going to take a credit card when you travel abroad, consider the MBNA Everyday Plus or Halifax Clarity cards as neither charges an overseas mark up or ATM fees.

Debit cards can also be expensive when used abroad and it’s something that holidaymakers sometimes overlook, until the charges are debited from their account and then it’s too late.

As with credit cards there is a debit card usage fee for cash withdrawals (2.75% to 2.99%) plus an ATM withdrawal charge typically between £1.50 and £5.00.

However, the card charges that catch most people out are those levied for debit card purchases which are subject to the usage fee above, plus up to an additional £1.50 per transaction regardless of the amount.

The most expensive debit cards are Halifax (£1.50 per purchase transaction), Santander (£1.25), Lloyds Bank and TSB both £1. If you’re looking for a fee free debit card for using overseas, you’ll need to open a current account with Norwich & Peterborough Building Society or Metro Bank.

It’s worth spending a couple of minutes to check with your bank what the charges are for your particular plastic before you set off, rather than getting a nasty shock when you check your account on your return.

At least if you understand the overseas charges, you can adapt your spending pattern accordingly – for example, you don’t want to be making cash withdrawals or purchases of £10 or £20 if you’re going to be hit with charges of £1.50 plus each time.

Looking at a scenario where you spend £1,500 currency equivalent including three £200 value ATM withdrawals and 9 purchase transactions, it would set you back less than £19 with a Prepaid Currency Card from Cash Passport or MyTravel Cash whereas using a debit card from TSB or Lloyds Bank would cost you £62.85 .

Prepaid currency cards are chip and PIN secure, accepted wherever you see the MasterCard symbol and are way cheaper than most debit and credit cards.

A sterling prepaid currency card can be loaded from your debit card and as such the exchange rate is locked in at the time the cash is transferred to the card, so you’ll know exactly what you’ll be paying for all your holiday transactions.

A final warning, whatever type of plastic you use overseas beware of an increasingly common custom (particularly in Europe) where the foreign retailer or ATM gives you the option to pay in pounds sterling, known as Dynamic Currency Conversion (DCC).

Although you know exactly how much you’ll be debited, the downside is that it gives the retailer the opportunity to use an uncompetitive and costly exchange rate – the golden rule is never pay in British pounds.